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JAIIB IE&IFS Unit 40 — Credit Rating and Credit Scoring: Free MCQs with Explanations

By Swarnakshi Jha (ex-banker) · Updated 20 September 2026 · Paper 1 of the November 2026 cycle (1 November 2026)

This page is a free slice of our JAIIB IE&IFS question bank for Unit 40 — Credit Rating and Credit Scoring (Module D — Financial Products and Services). The Mock Centre holds 79 questions on this unit alone, every one with a why-right / why-wrong explanation; below are the facts examiners keep returning to, five of those questions to try, and the traps that cost marks.

IE&IFS · Module D79 MCQs in the Mock Centre5 free belowPaper on 1 November 2026

Key facts examiners test from this unit

  1. Rating = CRA's OPINION on ability AND willingness to repay — guidance, NOT a recommendation; symbols readable by non-experts; entities/instruments only (never individuals).
  2. History: John Moody 1909 (US railroad bonds); Big Three = Moody's, S&P, Fitch; S&P rated France first (1959); CRISIL est. 1987 (operations Jan 1998 per the book); ICRA–Moody's tie-up.
  3. Scale: AAA highest → D default; BBB = last investment grade (BB and below speculative); modifiers +/− for AA to C; CRA-name prefix; watch = short-term signal; outlook = 6 months–2 years (positive/stable/negative).

5 free practice questions — tap an option

Five basic questions from this unit. Answers lock on the first tap, exactly as in the exam, and a short explanation opens underneath. The Mock Centre adds the moderate and tough questions, why every other option is wrong, the concept capsule and the exam tip — with your score and revision dates tracked.

Question 1 of 5
Credit rating is for business entities; credit scoring is for:
Why (b): The split to memorise: credit RATING serves business entities and instruments, while credit SCORING serves INDIVIDUALS — two different products for two different audiences.
Question 2 of 5
A favourable rating lets the ISSUER:
Why (b): A favourable rating lets the issuer BORROW AT CHEAPER RATES — lower perceived risk translates directly into a lower coupon on its bonds.
Question 3 of 5
A 'Stable' outlook indicates:
Why (b): A 'STABLE' outlook indicates a LOW likelihood of the rating changing in either direction — the steady-state signal.
Question 4 of 5
In India, credit scores are evaluated/monitored by:
Why (b): In India, credit scores are generated and monitored by CREDIT INFORMATION COMPANIES (CICs) — CIBIL and its peers — not by the rating agencies.
Question 5 of 5
Rating is alphanumeric; scoring is a:
Why (b): Rating is expressed in ALPHANUMERIC symbols (AAA, BB+); scoring is a THREE-DIGIT NUMBER in the 300–900 band — symbols versus numbers.
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
Credit ratingCredit scoringEntities/alphanumeric vs individuals/300–900
CRACICSEBI/1999 Regulations vs RBI/CICRA 2005
Practise all 79 questions on Unit 40. The free demo opens a slice of every subject with the same explanations; the IE&IFS Online-only pass unlocks all 3,032 IE&IFS questions, the full and module mocks, Smart Revision and the Readiness Score for one year (₹1,299). Not sure where you stand? Take the free 10-question test first.
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Independent study aid — not affiliated with, endorsed by, or sponsored by the Indian Institute of Banking & Finance (IIBF). Exam pattern, dates, fees and passing criteria are set by IIBF — always confirm the current rules at iibf.org.in. Regulatory figures verified as of September 2026; verify from official sources before relying on them in practice.